"Japan's Advertising Expenditures in 2019" achieved positive growth for the eighth consecutive year, with internet advertising expenditure, which continues to grow steadily, driving overall advertising spending.
Mr. Ritsuya Oku of Dentsu Inc. Media Innovation Lab interviewed Mr. Makoto Koide, Managing Director of the Japan Advertisers Association, about his views on mass media, the potential of digital advertising originating from the four major media outlets, and the future outlook for television.
Mr. Makoto Koide, Managing Director, Japan Advertisers Association (left), and Mr. Ritsuya Oku, Dentsu Inc. Media Innovation Lab
A "media-neutral" perspective, unconstrained by specific media formats, is essential
Oku: Japan's total advertising expenditure in 2019 reached ¥6.9381 trillion, marking the eighth consecutive year of growth since 2012. Internet advertising spending achieved double-digit growth for the sixth straight year, finally surpassing television advertising expenditure.
Koide: I had anticipated internet advertising spending surpassing television, so it wasn't a major surprise. However, what we advertisers should carefully consider here is not getting overly fixated on the advertising statistics showing which medium overtook the other.
What's crucial is always returning to a "media-neutral" perspective: utilizing the most suitable media to effectively promote products and services. Sometimes internet advertising is optimal, while other times TV commercials or newspaper inserts deliver the best results.
Oku: Each medium has its own role, right? As Mr. Koide mentioned, it's crucial to skillfully utilize television, radio, newspapers, magazines, and the internet from a media-neutral standpoint.
Koide: For advertisers to find the optimal solution—which media to use and how—they need deep expertise in each medium. For example, without understanding the strengths and weaknesses of digital advertising, its risks, and how it should be used, they can't compare it to other media and make informed choices. Planning from a media-neutral perspective is actually still quite challenging for advertisers.
Furthermore, I suspect that many media managers within advertising agencies are currently in a siloed state, possessing only knowledge and information about their assigned media. It's vital for TV, radio, newspaper, and magazine managers to gain proper knowledge about digital advertising, and digital managers must also understand other media. While challenging, I feel that advertisers going forward will need the ability to think cross-media, without separating mass media and digital.
Expectations for Growth in "Digital Advertising Originating from the Four Mass Media"
Oku: While internet advertising spending significantly exceeded the previous year's figures, advertising spending across the four mass media outlets (TV, radio, newspapers, magazines) fell below the previous year's levels.
Koide: I suspect this decline in the four major media's advertising revenue is due to the shift to internet advertising, which has captured massive advertising income. There are several reasons for this, but one factor might be the difference in speed between when an advertiser places an order and when the ad is actually exposed to the public.
Oku: With internet advertising, the PDCA cycle is fast, and the time from receiving an ad request to launching it is short, right?
Koide: For example, with TV commercials, deadlines like when to place the order and when to submit the ad materials were set quite far in advance. However, recently, TV has also updated to a more flexible approach. From the advertiser's perspective, it's becoming easier to use. I believe changing this stance is necessary to prevent a reduction in advertising spending across the four major media outlets.
But the most crucial thing is to further focus on and grow "digital advertising originating from the four major media outlets" (*), which continued to see growth in 2019. Over the past decade, while advertising spending on the four major media outlets has decreased by hundreds of billions of yen, internet advertising spending has increased by hundreds of billions of yen. There is inherent potential for the four major media outlets to recapture this lost ground by shifting to digital.
※ Digital advertising originating from the four major media outlets
Advertising spending on internet media services primarily provided by mass media companies
Oku: That's right. However, digital advertising spending originating from the four major media outlets remains at only about 70 billion yen overall.
Koide: To grow that, each media outlet needs to leverage its own strengths.For example, current internet advertising faces issues like ad fraud—where impressions and clicks are inflated—and brand risks from appearing alongside inappropriate content or fake ads. In response, newspaper digital advertising should emphasize providing secure ad space built on the foundation of "the trust inherent in the newspaper medium." Similarly, magazines can leverage their long-cultivated expertise in content creation to develop digital media offerings.
Oku: Among the four major media outlets, digital advertising spending for magazines has reached the highest total amount, driven by the significant growth in the e-publishing market. There still seems to be considerable room to leverage the strengths of mass media within the digital domain.
Koide: For example, some magazine publishers now see digital advertising revenue outpacing print advertising revenue within their advertising divisions. Another medium I want to highlight is radio. Looking at data from 2010 to 2019, while advertising spending across the four major media outlets dropped significantly, radio actually only declined by about 3%.
Oku: Radio has been the fastest among the four major media to push forward with digital transformation. radiko.jp, which allows listening via the internet, has been around for ten years now.
Koide: While radio is a mass medium, it created a system through digitalization that allows data collection 365 days a year. It enables time-shifted listening, and although it's not widely utilized yet, it also allows for targeting. I believe it's leading the way in defining a new form of mass media.
Oku: Television was a latecomer to digital initiatives compared to radio, but services like TVer and AbemaTV are gaining traction.
Koide: Precisely because TV entered the digital space later, I believe its potential is the greatest. Ultimately, mass media needs to secure personnel and funds to invest in new areas, even if it's just 10% annually.
Another crucial point is that digital must be considered on an annual basis, or even shorter cycles. The nature of digital is that platforms and popular apps change rapidly every year, so organizations need to adapt to this.
I hope television can be measured in "people" rather than "percentages."
Oku: In these times demanding change, what expectations do you have for television?
Koide: Television boasts an overwhelming number of viewers. To clearly communicate this massive scale to the public, television should emphasize not just the percentage-based "viewership ratings," but also the actual scale based on concrete numbers like "viewer count and viewing frequency."
For example, airing a TV commercial with a national household rating of 1000 GRP (※1) is equivalent to approximately 600 million views for a 15-second video ad. Assuming a cost-per-view of 1 yen for internet video ads, achieving 600 million views would require a whopping 600 million yen in advertising costs.
Even for a TV program with a 6% rating, given Japan's total of over 50 million households, commercials aired during the program reach approximately 3 million viewers. That's an impressive figure, right?
※1 GRP: Gross Rating Point (Total Viewership Rating)
The total rating points earned by a TV commercial aired over a set period. For example, airing a TV commercial three times during a program with a 1% rating yields 3 GRP.
Oku: Rather than focusing on the percentage represented by the rating, thinking about "how many people are actually seeing the ad" makes it easier to grasp the sheer volume of television advertising, doesn't it?
Koide: Understanding it in terms of actual people connects previously separate elements like "TV and online" or "terrestrial and satellite broadcasts," allowing us to "add them together." This makes it easier to understand when creating media plans or communicating the scale of initiatives to distribution channels.
Additionally, from an advertiser's perspective, I'd like to request more diverse programming that targets specific viewer segments. Create shows tailored to what each generation, gender, and distinct segment wants—programs young women enjoy, shows older men prefer, and so on. Having clearly defined, focused programming allows for efficient ad exposure to the target audience.
Television has moved beyond household ratings into the era of individual ratings. Depending on the advertising product, the programs advertisers seek are no longer those with a broad, evenly distributed audience across all age groups. Consequently, advertiser requests no longer concentrate on specific programs or time slots; they are distributed across various program slots.
Furthermore, if the aforementioned viewer numbers were publicly disclosed, it would simplify calculations for target CPM (Cost Per Mille) and facilitate efficiency comparisons with targeted digital advertising, opening up new opportunities.
※CPM: Cost Per Mille (cost per 1,000 impressions)
The amount required to reach 1,000 households (people) targeted by an advertisement.
Oku: TV programs include both national and local ones. Are there unique advantages to running ads on local station programs?
Koide: I suspect local TV stations aren't fully aware of how affordable their CPM rates are within their own areas. When calculated based on total population, CPM rates in regional areas are significantly lower than in the Kanto region. Many local markets exist where you can achieve 1000 GRPs at a very reasonable cost.
Therefore, more companies seem to be adopting a strategy where they first test-market commercials in low-CPM local areas. If the results meet expectations, they then roll out the same creative nationally. This approach of starting in regional markets and gradually expanding into densely populated areas is quite interesting.
Oku: In a way, it's similar to A/B testing in internet advertising, but it's fascinating as a TV advertising approach. With viewer count tracking, diverse programming tailored to specific demographics, and local-first commercial broadcasts, TV alone still has plenty of room to innovate and evolve to meet today's demands. Thank you for your valuable insights today.
Public Interest Incorporated Association Japan Advertisers Association
Managing Director
Joined Shiseido in 1984. After serving in the Sales Department, Product Development Department, Advertising Department, and Corporate Planning Department, he is currently Executive Manager of the Media Management Department at Shiseido Japan. Since January 2019, he has served as Managing Director of the Japan Advertisers Association. With many years of experience in advertising, he possesses deep expertise in both traditional mass media and digital advertising.
Ritsuya Oku
Representative of Media Vision Lab
Honorary Fellow, DENTSU SOKEN INC. / Director, Video Research Ltd. Media Design Institute
Joined Dentsu Inc. in 1982. Served in Media Services / Radio,TV Division, Media Marketing Division, and later held positions as Fellow at DENTSU SOKEN INC. and Head of Dentsu Media Innovation Lab. Left Dentsu Inc. at the end of June 2024. Established Media Vision Lab, a personal consulting practice. Primarily provides consulting services to media-related companies in the information and communications sector, focusing on three perspectives: business, audience, and technology.
Publications include: "The Birth of Neo-Digital Natives: The Internet Generation Evolving Uniquely in Japan" (co-authored, Diamond Inc.), "An Explanatory Guide to 'The TV Theory That Has Come Full Circle' and the Outlook for Broadcasting Services" (co-authored, New Media), "Confirming the Acceptability of Simultaneous Online Streaming of Broadcasts" ("Nextcom" Vol. 2017 No. 32, KDDI Research Institute), "New Media Textbook 2020" (co-authored, Sendenkaigi), "70-Year History of Commercial Broadcasting" (co-authored, National Association of Commercial Broadcasters in Japan), "Broad and Universal Online Distribution / NHK and Commercial Broadcasters: From Competition to Cooperation" ("Journalism" December 2022 issue, Asahi Shimbun), and "Information Media White Paper 2024" (co-authored, Diamond Inc.). Member of the Ministry of Internal Affairs and Communications' "Study Group on the Future of Broadcasting Systems in the Digital Age." Member of the Publishing and Editorial Committee, NPO/Broadcasting Critics Conference.
Launched in October 2017, leveraging Dentsu Inc.'s longstanding media and audience research expertise. Conducts research and disseminates insights to capture shifts in people's diverse information behaviors and understand the broader media landscape. Provides proposals and consulting on the communication approaches companies need within this context.
Special Discussion: "Japan's Advertising Expenditures" [5]
